Key Takeaways
- • Over a twenty-year horizon, private equity has delivered an average annual net IRR of 13.1 per cent versus 7.9 per cent for the MSCI World NR, a gap of more than five percentage points, according to PitchBook Benchmarks data as at 31 March 2025.
- • The article argues Italian professional pension fund investors should consider increasing their private equity weighting to channel savings into small and medium-sized enterprises seeking international growth.
- • Private equity is presented as a potential third pillar of retirement income alongside state and supplementary pensions, which the article says cover only a small share of final income.
- • The piece flags illiquidity as a key constraint, with capital typically tied up for 5 to 10 years, and notes risks of capital loss.
- • The author, Country Head for Italy at Altaroc, links the case to falling pension conversion coefficients across all age groups and a rising retirement age.
Summary
Writing in Il Sole 24 ORE, the author argues that Italy's demographic shift and the structural strain on its pension system call for a rethink of how savings are invested. The article contends that private equity can offer private investors diversification while helping to finance the real economy, though it frames the asset class as a long-term, illiquid commitment.
The article cites historical data to support its case. According to PitchBook Benchmarks (data as at 31 March 2025), private equity delivered an average annual net IRR of 13.1 per cent over twenty years, compared with 7.9 per cent for the MSCI World NR. The author notes that large pension fund investors in the United States and Canada already allocate significant resources to private markets, treating private equity as part of diversification and value-creation strategies. Value creation is described as coming from management strengthening, digital transformation, acquisitions and internationalisation.
On the national dimension, the article highlights Italy's substantial private wealth and its base of small and medium-sized enterprises with international growth potential. It argues that private equity can supply the capital and expertise these firms need to innovate and compete globally, with successful investments boosting competitiveness and employment. On this basis, the author suggests professional Italian pension fund investors might increase the weighting of the asset class in their portfolios.
The article positions private equity as a possible third pillar of retirement provision, complementing rather than replacing state and supplementary pensions. It advises readers to review their pension plans with advisers, taking into account falling coefficients and the rising retirement age, and to consider private equity only where they have assets that can be locked up and a suitable investment horizon. The piece carries explicit risk warnings on capital loss, liquidity and the fact that past performance is not indicative of future results.
The article cites historical data to support its case. According to PitchBook Benchmarks (data as at 31 March 2025), private equity delivered an average annual net IRR of 13.1 per cent over twenty years, compared with 7.9 per cent for the MSCI World NR. The author notes that large pension fund investors in the United States and Canada already allocate significant resources to private markets, treating private equity as part of diversification and value-creation strategies. Value creation is described as coming from management strengthening, digital transformation, acquisitions and internationalisation.
On the national dimension, the article highlights Italy's substantial private wealth and its base of small and medium-sized enterprises with international growth potential. It argues that private equity can supply the capital and expertise these firms need to innovate and compete globally, with successful investments boosting competitiveness and employment. On this basis, the author suggests professional Italian pension fund investors might increase the weighting of the asset class in their portfolios.
The article positions private equity as a possible third pillar of retirement provision, complementing rather than replacing state and supplementary pensions. It advises readers to review their pension plans with advisers, taking into account falling coefficients and the rising retirement age, and to consider private equity only where they have assets that can be locked up and a suitable investment horizon. The piece carries explicit risk warnings on capital loss, liquidity and the fact that past performance is not indicative of future results.
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